British Air, American Consider
Scaling Down Their Alliance

By

Charles Goldsmith Staff Reporter of The Wall Street Journal

Updated Aug. 18, 1997 12:01 a.m. ET

Fourteen months after unveiling a sweeping alliance, British Airways and AMR Corp.'s American Airlines still seek approval for the full deal, but are preparing for the prospect of a scaled-down linkup amid regulatory resistance.

Although the airlines publicly voice optimism that a broad alliance can proceed, people familiar with the thinking at both carriers say that contingencies for a looser alliance are being mapped out. At British Airways, in particular, there's a growing feeling that the price now being demanded by...